tv [untitled] April 7, 2012 12:30am-1:00am PDT
st. luke's hospital. cpmc will pay appraised market value for this piece of st.. the dhs a variety of strong -- the d.a. has a variety of strong enforcement mechanisms. if there is not a straightforward performance obligation, the city has the right to terminate and sue for a specific penalty or monetary damages. in addition, because there are so many health obligations, the city has negotiated and included specific liquidated damages for non-performance of any of the health-care obligations. these include, but are not limited to, the obligation to open st. luke's before opening cathedral hill, to operating looks for 20 years, and other key health care obligations you will hear about it in a moment. and lastly, the cpmc is required
to provide an annual report on all obligations to provide the board of public health and planning certified that they are in compliance. if either director finds that cpmc is out of compliance, they in conjunction with the city attorney can begin the enforcement steps outlined above. that includes the general terms. what i am going to do now is turn it over to barbara garcia, the director of public health. >> good morning, commissioners. is great to see you again. i am going to be sharing my question today. i did want to give today the help related provisions, as well as some of the background for
how we got here today. i do want to cpmc think the -- thanks the cpmc negotiating team. i will also want to thank the community coalitions we worked with and to have been entering this process. they are part of the cpmc negotiating team. as you are aware, it is mandated that our city hospitals be it seismically safe. i have my own experience during the 1989 earthquake. our hospital was severely damaged during the 1989 earthquake. we have hundreds of patients in parking lots as they were trying to determine the safety of the hospital. they have to be ready to care
for san franciscans. in accordance with state law, all hospitals, including our very own san francisco general hospital, are on the way to meeting strand it -- stringent safety standards. the hospitals will operate as a cohesive system to give patients the access to care they need on campus and health providers meet san francisco's health care needs. that includes the care of low- income, under-insured, and publicly-insured san franciscans. specifically, there is access to cpmc's new cathedral killed campus. i would like to acknowledge the
health care commission, because they engaged with cpmc on these issues related to under-served populations. identified the need to increase cpmc responsibility and accountability. about 12 years ago, they agreed on specific measurable goals to improve performance. i am pleased to say that cpmc has continued to achieve their goals in health care services. it was important to build a body of significant work that the health commission had already done. at the core of the recommendations of both the health commission and the blue ribbon panel, the motion that our nonprofits have a responsibility have -- ever
responsibility to care for our cities most vulnerable populations. this is dedicated to doing just that. >> [unintelligible] >> ok, before getting into the specifics of the health care provision, i would like to provide you with detail on the health commission history. in 2008, a blue-ribbon panel on the future of st. luke's established cpmc on the st. luke's campus. the blue-ribbon panel was challenged to create a viable plan for blue-ribbon care and outpatient services. the blue ribbon panel on the future of st. luke's hospital includes 11 recommendations. among those recommendations that i knew it acute-care hospital should be rebuilt on the campus, that the size of the hospital should be it corporate to the
planned improvements, and it should represent the commitment to excellence in health care. the house passed or recommend -- a resolution based on the recommendation. the health commission has two additional resolutions related to cpmc. i to thousand nine, it supported the rebuilding of -- in 2009, is supported the rebuilding cpmc facilities. replacing skilled nursing facility beds that are not included in the plans of the hospital, and supplementing the recommendations of the blue- ribbon panel. in accordance with this, the health commission also established a task force on cpmc's master plan. agreements resulted in a third
commission resolution which was passed in march 2010. this resolution set specific goals for each of the eight recommendations, most of which have the time to responsibilities for the two hospitals. the help commission has been monitoring cpmc's progress toward these shuttle endeavour. in 2010, they achieve 20 targets two years early. specifically they agreed to increase charity care from 5.3002007 to 9.5 million in 2012 -- 5.3 million in 2007 to 9.5
million in 2012. they provided 7.9 million in care to underserved beneficiaries. i think you will see the agreements that you'll your former deputy director and detailed really to match the health commission policies as they work toward the cpmc. i look forward to coming back to answer any of your questions. i now give it to our deputy director who will go through the details. >> good morning, commissioners. i am pleased to be here before you to talk a little bit about the health provisions. can i have the overhead please?
director garcia at provided you with background on the history between the commission and dph. also impacting the dph decision was help perform. health reform was enacted in march 2010, and takes a multi level approach to increasing the number of people who of access to health insurance. specifically there is the individual mandate which requires all u.s. citizens and legal residents to have health insurance with a few exceptions. for the lowest income individuals, it increases eligibility for medicaid, which is known as metical -- medical in california. for the lowest incomes, it provides subsidies for the cost of health insurance. it helps to allow people to have
those subsidies to apply for health insurance and to retain health insurance regardless of pre-existing conditions and the guarantee of renewal. well some of the insurance reforms have been implemented already, most of the provisions i have just described become effective on january 1, 2014. it is anticipated as a result of health reform, 90% of u.s. residents will be insured by 2016. according to the most recent data, approximately 117,000 san franciscans were uninsured for all or part of 2009, and the most recent year this data was available. although 117,000 were uninsured, approximately two-thirds will be eligible for health insurance as a result of health reform.
health reform will reduce by 67% the number of san franciscans who will be relying on services. as the 80,000 will be eligible for health insurance, 30,000 will enroll in the medical program. currently, healthy, low-income single adults between the ages of 18 and 64 are generally ineligible for metical -- medicacal. health reform changes this significantly. beginning in 2014, all adults below the federal poverty level
for an individual will be eligible for medi-cal regardless of their health status. it is anticipated that san francisco well enrolled 30,000 new individuals in medi-cal by 2014. i am sure the commissioners are aware of the current supreme court challenge to help perform. the supreme court heard oral argument next week. it is unclear what the court will decide, but the court has several legal questions are in for a debt and there are a number of potential scenarios. it could uphold the law in it's entirety. it could strike down the law in it's entirety. the part we rely on most heavily is the medicaid
expansion. and mike health reform's other provision currently being reviewed by the supreme court, the medicaid expansion has been upheld in the lower courts two times. hopefully health care reform will remain in -- intact. even if it is struck down, the state of california can on its own implement many of the provisions of health reform and has stated its intent to do so. however, please no the developed agreement does include a provision that required the city and cpmc to confer if there is a change in the law. we would discuss our range of alternatives depending on how the court rules, that they could include increasing levels of charity care for the uninsured. could i have the overhead again please? i would like to cover one last
piece of background information before i get into the details of the health care provision agreement. we thought it would be helpful to provide a level of medicaid. medi-cal has historically delivered two systems, fee-for- service and managed care. under the fee-for-service program, providers are paid for each service they provide, such as an office visit, a test, procedure, other health service. well the fee-for-service system allows patients to paid for the services they choose, but it does not allow providers to provide more coordinated services. under the managed care, patience
and role in a health plan with participating providers. the plan and the providers manage the patient's care to provide better quality and better health outcomes. in an attempt to increase quality, the state is moving away from fee-for-service medi- cal and to managed care medi- cal. as a result, all the san franciscans to become eligible will be required to enroll in medi-cal managed care. there are two systems participating in the medi-cal program. blue cross provides care for -- ensures 25%. wants a health care beneficiary chooses a health plan, they then choose a provider. but sign up for several provider networks. each provider network is
composed of a primary care provider, and network of specialty care physicians -- dermatologists, oncologist, gastroenterologists. for the san francisco helped program, these networks are one to one to one partnerships. this team of providers as soon as responsibility to provide all the cover health care services to member needs in exchange for one flat fee per member per month, regardless of how frequently are infrequently they use their healthcare services. with the exception of emergencies, patients must receive their care from the provider only within their network. to meet the health care needs of the 30,000 new individuals who would be eligible for medi- cal in 2014, san francisco will
need a sufficient supply providers willing and able to participate in the medi-cal program. now i will get into the key health care provisions of the proposed development agreement. @ think you'll see the provisions are based on the blue ribbon panel from st. luke's, and in addition, they parallel health reform focus and the need for charity care to serve the uninsured and the increasing reliance on medi-cal managed care. this slide provides information on specific provisions of the proposed development agreement for st. luke's hospital. still looks is widely viewed as a valuable -- st. luke's is widely viewed as a valuable committee restores. first, cpmc must construct an open a new seismically-safe still looks hospital on or before the opening date of
cathedral bill. second, the st. luke's hospital operating commitment. cpmc would agree to operate st. luke's as a general acute-care hospital for least 20 years, providing cpmc remains financially solvent. it is measured by looking at operating margins, which is the percentage by which had total revenues exceed expenditures. it remains above,%, and cpmc is required to operate same looks for 20 years. singlets can only be closed if cpmc's operating margins at fall below 1% for two years.
specifically, these provisions build upon blue ribbon panel recommendations and require that st. luke's be operated as a full-service general care hospital with emergency room. as proposed, the emergency room will be bigger. in addition, st. luke's will have to the centers of excellence, one in senior help, and the other in emergency help. the center of excellence in senior health will be able to hospitalize older adults to maintain the function and maximize independence at discharge. the final provision i would like to highlight relates to the new medical office building. the proposed development agreement requires cpmc to entitle a new office building as part of this process.
if that does not happen, the city will have the right to lease the property for a nominal amount. in addition to providing a secure future for st. luke's, the proposed development agreement will continue to provide a baseline level of care for san francisco's most normal populations for the next 10 years. cpmc will continue to spend at least $86 million a year. there are three components that comprise this baseline level of care. the first is charity care, which is the provision of health care services to low-income people without the expectation of reimbursement. medi-cal shortfall, which is the term for the on reimbursed
cost of providing health care to the patient. and the third element is grants to organizations that also provide care to these low-income populations. the baseline at $86 million was averaged over the last three years of expenditures in this area and it will adjust each year in proportion to the overall rate of inflation. it will be committed to 40% of cpmc ebitda for that year. it is a measure of income that you here because it excludes the effects of capital projects. and other words, using ebitda ensures the building of these two hospitals cannot in and of itself affect the baseline agreement. finally, cpmc will provide a $20
million backstop fund. there is one last important point i would like to note regarding the baseline commitment. every other provision that will be discussed here today is over and above this continuing commitment and cannot be counted as part of the $86 million baseline. earlier, you heard on january 1, 2014, the proposed development agreement would require cpmc to provide care for 10,000 of the newly-eligible medi-cal beneficiaries. cpmc would do this by partnering with two primary-care providers to provide hospital care at the cathedral hill campus. this represents a 70% increase a
medi-cal in the current -- increase in the current medi- cal managed care beneficiary proportion. this provision was crafted specifically in response to the shift of 30,000 individuals from being uninsured and becoming ensured and reliance medi-cal on. -- reliant on medi- cal this revises the cost for these but the fish sherries to 9.9% per year -- beneficiaries to 9.9% per year. it is confident the upper limit will be sufficient to ensure all 10,000 beneficiaries are care
for. i mentioned earlier this provision was drafted in response to health reform and is moving health care into the future. however, the health reform will reduce the number of san franciscans to rely on charity care. it will not eliminate it. the need for stanford cisco's low-income populations will remain -- san francisco's low- income populations will remain. i also spoke earlier about the necessary elements to create a managed-care network. has said it would require a primary care provider, a specialty care network. it requires a significant amount of infrastructure and then contract with the managed care plan. the $20 million community care innovation fund will be established by this development
agreement and will help san francisco development agreements thrive. the new commitment will see the cpmc partner with two new providers, one of whom is in the tenderloin. there is no tenderloin provider that currently has the infrastructure to participate in medi-cal managed care. this will provide funds for other community-based health- care clinics. this will help clinics not only so they can cpmc partner with -- so they can partner with cpmc, but also so they can participate more broadly in managed care. in addition, the community care innovation fund will support other funds and providers with a
particular focus on san francisco's low-income neighborhoods. the community care fund will be managed by the san francisco foundation and will be joined by cpmc. the d.a. also required cpmc steve -- also requires the cpmc to maintain hospital beds for the next 10 years. did provide medical services in a residential setting. is the highest level care patients can receive outside a hospital. skilled nursing care is 24-hour residential care. cpmc currently provides nursing care for approximately 100 patients.
approximately 62 patients are receiving skilled nursing care at st. luke's. the average occupancy rate for 2010 was 71%, which is equal to the 62%. cpmc is not proposing to include new nursing beds, but instead will add 62 new beds in san francisco. these beds will not be from existing stock, but in still -- instead will be it from a new provider for this purpose and will maintain the overall availability of nursing care. we will except patients medi-cal who have, medicare, -- who have medi-cal, medicare, and private insurance. finally, the d.a. would provide a broad range of other community benefits, including working with other hospitals subacute care
management. is a level of care by a patient that does not require the level from an acute a hospital, but more than a skilled nursing facility. they will continue their efforts to integrate the medical staff on all other campuses. currently st. luke's has a medical staff from california pacific. it will ensure that hospital care is seamless, and all patients had equal access to health care facilities. they will continue to actively participate in the community benefits partnership, which is a coalition of hospitals, the department of public health, health care clinics, and others that prioritizes health-care resources to meet those needs. and they will continue to provide certain specialty services. this provision will continue the
current arrangement between cpmc and chinese hospital where cpmc provides certification services to hospital patients. and finally, they will deliver all their services in a culturally and linguistically appropriate manner that is representative of the diverse population of san francisco. at this point, i would like to turn the presentation over to catherine dodd. >> thank you. user the director of the health service system that negotiates -- i am the director of the health service system that negotiates the health services for the employees of the city and county district, the school district, and the course. this has been a long time coming. i served as a member of the health commission and we began this. i worked for mayor knew some